What's Happening?
Capri Holdings, the parent company of Michael Kors, Jimmy Choo, and Versace, reported a 4.2% decline in revenues on a constant currency basis, totaling $856 million for the second quarter of 2026, which ended on September 27, 2025. This performance slightly
exceeded analyst expectations, which ranged between $815 million and $835 million. The company's gross profit decreased from $547 million to $522 million, with a gross margin decline from 62.3% to 61%, attributed to tariffs. Operating losses increased to $12 million, up from $6 million in the previous year. Despite these challenges, Capri Holdings maintains its full-year revenue outlook of $3.38 billion to $3.45 billion and anticipates a return to growth in fiscal 2027. The company is also preparing for the sale of Versace to the Prada Group, expected to close in the third quarter.
Why It's Important?
The financial performance of Capri Holdings is significant as it reflects broader trends in the luxury fashion industry, particularly in the context of economic fluctuations and changing consumer behaviors. The decline in revenue and operating losses highlight the challenges faced by luxury brands in maintaining profitability amid global economic uncertainties. The anticipated sale of Versace to the Prada Group marks a strategic shift for Capri Holdings, allowing it to focus on strengthening the Michael Kors and Jimmy Choo brands. This move could potentially streamline operations and improve financial stability. The company's decision to authorize a $1 billion share repurchase program indicates confidence in its long-term growth prospects, which could positively impact shareholder value.
What's Next?
Capri Holdings plans to enhance the desirability of the Michael Kors brand through store renovations, including the addition of cafés, with expansions planned for major cities such as Paris, Beijing, Tokyo, and Las Vegas. The company is also focusing on increasing full-price sales at Jimmy Choo to improve margins. As the sale of Versace to the Prada Group approaches, Capri Holdings is expected to concentrate on optimizing its remaining brand portfolio. The luxury fashion industry will be closely watching how these strategic initiatives impact Capri Holdings' financial performance and market position in the coming years.
